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Earlier this week we reported on proposed bills regarding the repeal or modification of the “Johnson Amendment” which established the absolute prohibition on political campaign activity by 501(c)(3) charitable organizations. On May 4, President Trump issued an executive order, “Promoting Free Speech and Religious Liberty,” which, among other things, addresses enforcement of the prohibition by the Internal Revenue Service (IRS).

The executive order requires the Secretary of the Treasury to ensure “to the extent permitted by law” that the Department of the Treasury (including the IRS) does not take any “adverse action” against “any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.”

For purposes of the executive order, an adverse action means “the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) [of the Internal Revenue Code]; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.”

The Secretary of the Treasury has been instructed to limit adverse action only in response to speech on “moral or political issues” that has not historically been treated as violating the prohibition. Religious organizations and their leaders can therefore continue to make general statements about politics or policy – a right that is not limited by the absolute prohibition – while the absolute prohibition technically still remains subject to enforcement. Less certain is the “soft” impact the executive order will have on enforcement – despite the limited scope of the actual words of the order, it sends a strong signal to the IRS that churches and messages from the pulpit are to be tolerated and not subject to IRS interference.

In the end, the executive order does not provide useful guidance on how deep into the water of political campaign intervention religious organizations and their leaders may immerse themselves. However, it seems likely that, notwithstanding the ambiguities in the language of the executive order, the IRS will shy away from enforcement in this area, particularly given the backlash it faced (and continues to face) from the Tea Party scandal in the early part of the decade.